NGX Capital Markets Conference: How Nigeria’s capital market attract more investors

Nigeria's capital market is at an inflection point, with a crucial role to play in driving sustainable economic growth and recovery. In a recent interview on CNBC Africa, Funso Akere, the CEO of Stanbic IBTC Capital, highlighted the importance of the on-going drive by the Nigerian Exchange Limited (NGX) to attract more investors to the capital market through innovative sources of financing. Akere commended the NGX for its initiatives in market development, such as the introduction of real estate investment trusts (REITs) and special purpose acquisition companies (SPACs) to energize the market. The capital market in Nigeria plays a vital financial intermediation role, mobilizing savings towards productive projects. Akere emphasized the need for collaboration among various stakeholders, including government officials, the Securities and Exchange Commission (SEC), and industry players, to enhance the efficiency of the capital market and facilitate inclusive growth. He noted that there is a consensus on the need for infrastructure development to spur economic growth in Nigeria, particularly in light of revenue generation challenges. Reflecting on the role of the capital market in driving sustainable economic recovery, Akere pointed to two key aspects. Firstly, he highlighted the impact of raising capital for critical infrastructure projects, citing the example of the federal government's Sukuk program, which raised funds for the rehabilitation and construction of roads across the country. Such investments not only enhance economic connectivity but also stimulate economic activity and growth in various regions. Secondly, Akere underscored the importance of the capital market in supporting the private sector, which plays a significant role in economic development. Access to a vibrant capital market enables companies to raise equity, expand their operations, and contribute to job creation and higher disposable incomes. Akere referenced past periods of robust capital raising in Nigeria, such as 2003-2008 when around $10 billion was raised, leading to increased investor confidence, foreign direct investment (FDI), and business expansion. Looking ahead, Akere outlined the potential for further evolution in the capital market, particularly in the issuance of products like Sukuk and the revitalization of the primary market. He highlighted ongoing infrastructure projects funded through capital market instruments, such as the development of free zones and investments by telecommunications companies like MTN. Akere emphasized that these investments in critical infrastructure and technology support economic growth and employment opportunities for the Nigerian workforce. In conclusion, Akere emphasized the significant impact of capital market activities on economic development in Nigeria, both in terms of infrastructure financing and private sector support. The drive by the NGX to attract more investors and enhance market efficiency is key to unlocking new opportunities for growth and prosperity in the country's economy.